Senate to vote cash-for-guzzlers bill after House passage
Uncle Sam might be ready to give you up to $4,500 if you swap an old polluting car or truck for a brand new - and more fuel efficient - vehicle. The Sutton Fleet Modernization bill, which passed the House yesterday and will now head to the Senate, requires the car being traded in to get less than 18 mpg, one mpg more than a previous and similar bill. Buyers who want the $4,500, need to buy a new car that gets at least 10 mpg more than the old one. The total cost of the program could reach $4.5 billion, as up to a million vouchers can be be issued to car purchasers. This measure is similar to European cash-for-clunkers bills except that the European rules focus more on the age of the car being traded in rather than on mileage improvements. The Auto Alliance was pleased with the House passage of the bill, saying, "Now more than ever we need this fleet modernization proposal to be passed by the Senate and quickly signed into law by the President." Their full statement is after the jump.
[Source: Automotive News (subs. req'd)]
PRESS RELEASE:
Automakers Applaud House Passage Of Sutton Fleet Modernization Proposal
Washington, D.C. – The Alliance of Automobile Manufacturers (Alliance) today praised the House of Representatives for supporting a fleet modernization, or "cash for clunkers," bill sponsored by Representative Betty Sutton and a broad, bipartisan group of lawmakers. Automakers believe a well crafted fleet modernization program will provide two beneficial effects: helping to stimulate auto sales during the current economic/credit crisis and replacing older, less fuel-efficient vehicles with cleaner, safer, more fuel-efficient ones.
Alliance President and CEO Dave McCurdy stated, "The passage of this legislation is good news for manufacturers, auto dealers, suppliers and most importantly consumers. With just released May auto sales reporting a 31 percent drop from just a year ago, we can't afford to wait any longer. Now more than ever we need this fleet modernization proposal to be passed by the Senate and quickly signed into law by the President."
Around the world, consumers are already benefitting from similar programs, and the resulting economic stimulus has been significant. In January, Germany implemented a fleet modernization program. At the end of the first month of the program, sales in Germany were up 21% over 2008. Corresponding sales in the U.S. were down 41% for the same period. As of this writing, fleet modernization programs have been adopted in China, UK, Brazil, Spain, Austria, France, Italy, Portugal, Romania and Slovakia, and are under consideration in several others.
McCurdy added, "The U.S. is already well behind other major economies in adopting a fleet modernization program. Since January, Congress and the President have been discussing this issue and there is now growing concern that many buyers are actually delaying purchase decisions until the Congress acts. "
The Alliance is a trade association of eleven car and light truck manufacturers including BMW Group, Chrysler LLC, Ford Motor Company, General Motors, Jaguar Land Rover, Mazda, Mercedes, Mitsubishi Motors, Porsche, Toyota and Volkswagen.
Reader Comments (Page 1 of 1)
paulwesterberg 2:50PM (6/10/2009)
So if you cashed in your SUV for a chevy volt you might be able to get it for less than 30k if you combine this with the 7.5k in plug in hybrid subsidies. 40k-4.5k-7.5k = 28k
If toyota upgrades the prius battery to a larger 4kWh+ lithium pack and adds a plug it could make the prius the most affordable hybrid: 25k-4.5k-2.5k=18k
I currently own 2 cars, a prius and a clunker, but my clunker get 23mpg which is a bit too much to get any government money. When I want to upgrade my 2nd car could I buy some pos suv for 500 and then get 4k off on my (hopefully electric) car? What happens to these clunkers? Are they crushed, resold, shipped to mexico/guatemala?
Suppose a family has 2 cars:
suv : 15mpg
sedan: 25mpg
And they want to upgrade their vehicles couldn't they just do this:
trade in suv for a new 25mpg sedan and pocket 4.5k in cash!
trade in sedan for a new 15mpg suv!
Net change in gallons of gas consumed: zero.
This type of program should be funded by increasing the gas tax by .25 each year so there are more incentives in place to for people to use energy resources wisely.
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Chris 8:50PM (6/10/2009)
The net change is that there are two new car purchases to help the struggling auto industry and the hope that the newer vehicles are cleaner (emissions wise) than the older ones.
I'm not saying that's the way it would work out but that's the potential up-side even if the MPGs stay the same.
eb 3:36PM (6/10/2009)
Can they trade in a clunker for an NEV? Can they trade in a gas motorcycle for an electric motorcycle? Or does the new car have to be a highway-speed car?
$4,500, plus 10% federal tax credit, plus maybe more from a state tax credit gets you a GEM car for more than 60% off the sticker price (assuming a GEM costs about $9,000). Could be great for fleets to scrap their little old gas-guzzling pickups.
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Frank 3:59PM (6/10/2009)
While many people point to the resounding success this has had overseas, I think most people fail to realize that Europeans keep their cars much longer than Americans so there are many more "clunkers" to be traded in. Not to mention the fact that our emission standards have been stricter than theirs for some time already. When you combine that with Americans dumping their cars after 5 or 6 years, we're not talking about huge improvements environmentally.
If this is a fiscal type thing, I see it as yet another bail-out, this time for people who chose to buy gas guzzling SUVs and trucks. How many of those people who are still driving these vehicles want to give them up for something else, likely a smaller vehicle?
The idea is good, the execution is sub par.
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Non-Socialist Individual liberty supporter 4:13PM (6/10/2009)
paulwesterberg stated that "This type of program should be funded by increasing the gas tax by .25 each year so there are more incentives in place to for people to use energy resources wisely."
Paul,
Gas taxes have been squandered in every state in the union and yet you advocate increasing these just as millions of people are suffering to just put food on their tables. I don't know of anyone other than state and federal workers who have not had a reduction in hours or pay and yet, you somehow think that the government should be involved in yet another huge welfare scam to help who? Be honest with yourself and generate the list yourself and tell me it isn't another variation of a power play by all the old favorites to the left.
I am a total fan of all things high tech and looking to the future but to force your limited view points on others through financial chains is socialist and ultimately shows the hypocrisy of the left. Everyone can do anything they want as long as you agree with me is not liberty it is tyranny plan and simple.
I really like Autobloggreen but the polarization of a issue such as this has always bothered me. Where is it wrong to have a classic old car and to want the hobby protected from the mass transit city dwelling Nazi that would advocate for making it impossible for anyone other than the rich to have a unregulated hobby. Mind you the average person that has a classic car does not drive them daily. I own a 1963 and 1971 VW Beetle Convertible and a 1968 Karmann Ghia along with a 2001 Turbo beetle, 2002 F250 Diesel crew cab and 2007 Mazda 3 and a electric lawn mower and I can safely say that the best cradle to grave vehicles I own are the oldest ones. How about a program for the government to stay the hell out of our individual lives and make sure that the cars that are on the road are safer because the roads are no longer full of pot holes and falling bridges.
BTW - Non of us will know what the next classic car will be so lets just make sure that the laws that are already on the books are enforced and stop with all the financial enslavement talk
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Are you crazy 4:12PM (6/10/2009)
Just what we need. Borrow more money from China to increase our debt, so we can pay more taxes just to get people to buy new cars they can't afford that have a greater cradle to grave impact than most of the cars that will be traded in. Liberals, I just don't get the logic?
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contact 4:24PM (6/10/2009)
I'm in. As soon as it passes I'll be at the lot.
The logic is here:
someone gets a $4500 credit to purchase a $20-40k car on a loan w/ interest,. You give them a little to make it back and more in the long run. It's an investment.
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nz 4:34PM (6/10/2009)
Why limit it? So, I've been as environmentally conscious as I could afford to be (Ford Focus) and am ready to buy a new car. I'm looking only at hybrids that'll net me a 10+ MPG advantage. Why does that guy that's been murdering the environment with his 18 MPG SUV get a tax break to upgrade, but I don't? 10MPG is 10MPG isn't it? Can someone look out for those TRYING to do the right thing?
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SKluck 8:46PM (6/10/2009)
I will also be there as soon as this is signed by the prez.
Fully loaded Fusion Hybrid = $33,000
- $4,500 (Town Car 'Junker')
- $1,700 (Hybrid Tax Credit)
- $3,300 (Ford Employee Plan)
- $500 (College Grad Discount)
= $23,000 for a brand new fully loaded Fusion Hybrid! That is a steal.
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Shaun 10:14PM (6/10/2009)
Wow!
What a spectacularly useless piece of legislation!
I have an 8 year old minivan that averages 17 MPG so it certainly qualifies. However, I have a wife and five kids and need some sort of van or suv with at least 7 seats. I have not been able to find a single one that averages 27 mpg. The closest I found was the Toyota Highlander hybrid which has 7 seats but comparatively little utility beyond that.
My other car is a 2 door that is a lousy family vehicle. I'd love a good incentive to trade that but it averages 22mpg and can hit 30mpg on the highway.
Guess I'm stuck.
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Bill 7:50AM (6/11/2009)
This is more of a light-truck manufacturer bailout.
The improvements in mpg to get the cash are far less for trucks than cars under the bill.
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Greg McKenney 7:01PM (6/11/2009)
This proposal has this driver sitting on the fence waiting (just as some feared it would). I commute about 40 miles round trip each work day. I bought a 2001 Jeep Cherokee new in 2001. When it snows I have no problem getting to and back from work. It now has 150,000 miles on it. According to Kelly Blue Book it is worth around $3,000 tops. The EPA figures for it are around 14mpg average and 18mpg on the hiway. The $4 gas got me thinking about trading the Jeep in on something that gets 30mpg or higher, but because of this bill looming in the wings I've been waiting to see if I can get another $1,500 out of the deal. Besides the Jeep is paid for. My questions about this proposal are : When is the Senate set to vote on this? How soon after (when and if) it passes will it get implemented? How exactly does this work...Do I apply to the government for a "voucher" and then take it to the dealer (How long would that take?) or will the dealers be handing out these "vouchers"? Also which EPA mpg figure are we talking about here, the average or the highway? I do agree with one comment made here concerning the mpg maximum on the old car. My wife's Ford Taurus gets about 23mpg most of the time. Why can't I get a voucher to upgrade it to a new car that gets 35mpg?
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john 9:12PM (6/11/2009)
I have a 2000 lincoln lx it gets about 15 -19 miles per gallon would i get $4500.00 on a new car trade in ?
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Brian 2:01PM (6/16/2009)
The way I understand it: the city/highway MPG estimates are averaged - 14/20 = 17. The "vouchers" will be paid directly to the dealer. I have a 1979 Ford F250 that averages 11 MPG per the EPA, 8 MPG in reality and I am hoping that it qualifies. $4500 from this program will be more than I can get for it any other way and I get into a decent vehicle.
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Paul 9:47AM (6/21/2009)
This is the most ridiculous waste of taxpayer dollars. The whole idea of the "Cash for Guzzlers" incentive should be to get those older polluting gas guzzlers off the road and scrapped. If we just let the old car continue in operation with a new owner the only impact is tax dollars added to dealer and manufacturer incentives.
Before this is renewed let's see the requirement to scrap the vehicle come in.
All this would not be needed if the government had the guts to do what is needed by taxing fuel more each year so in a few years it costs what it does in Europe. People would buy fuel efficient cars, imports of oil would reduce, the environment would improve and if the tax money was used properly it could fix Medicare and Social Security.
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